It has been about a month since the last earnings report for Wayfair (W Quick QuoteW - Free Report) . Shares have lost about 12.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Wayfair due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Wayfair Inc. before we dive into how investors and analysts have reacted as of late.

Wayfair Q2 Earnings Beat Estimates on U.S. Demand, Market Share Gains

Wayfair reported second-quarter 2026 earnings of 95 cents per share, which beat the Zacks Consensus Estimate of 94 cents. Net revenues for the second quarter of 2026 rose 7.5% year over year to $3.52 billion, surpassing the Zacks Consensus Estimate of $3.47 billion by 1.41%.

The outperformance was driven by accelerating U.S. demand, sustained market share gains and outsized growth from the company's specialty and luxury brands, including Perigold.

Last Twelve Months (LTM) net revenues per active customer increased 4.2% year over year to $596 as of June 30, 2026. The active customer base rose 3.3% year over year to 21.7 million.

Wayfair’s Q2 in Details

Net revenues in the United States (88.8% of total net revenues) increased 8.7% year over year to $3.13 billion, the strongest growth the segment has posted in the post-pandemic period. International net revenues (11.2% of total net revenues) declined 1.3% year over year to $394 million. On a constant currency basis, international revenues declined 2% year over year.

Orders per customer (LTM orders delivered divided by active customers) were 1.89 for the quarter, up from 1.86 in the second quarter of 2025. The average order value expanded from $328 to $332 year over year.

Total orders delivered in the second quarter were 10.6 million, up 6% year over year. Repeat customers placed 8.5 million orders (80.2% of total orders delivered), representing an increase of 4.9% year over year compared with 80.7% of total orders in the second quarter of 2025. Mobile orders accounted for 64.1% of total orders delivered, up from 62.9% in the second quarter of 2025.

Operating Results of Wayfair

Wayfair's second-quarter gross profit was $1.05 billion, representing a gross margin of 30%, which contracted 10 basis points year over year. Non-GAAP Contribution Profit was $539 million, or 15.3% of net revenues, representing a contribution margin improvement of 10 basis points year over year. Adjusted EBITDA was $242 million in the reported quarter, up 18% year over year, representing an adjusted EBITDA margin of 6.9%, which expanded 60 basis points year over year and marked the company's best margin performance since 2021.

Customer service and merchant fees represented 3.6% of net revenues. Advertising expenses represented 11.1% of net revenues, an improvement of roughly 30 basis points from the second quarter of 2025. Selling, operations, technology and general and administrative (SOT G&A) expenses were $361 million for the quarter, delivering 100 basis points of leverage against the prior-year period.

Wayfair reported a GAAP net loss of $1 million for the second quarter against GAAP net income of $15 million in the second quarter of 2025. GAAP loss per share was 1 cent versus earnings of 11 cents a year earlier. Second-quarter results included a $59 million loss on debt extinguishment tied to the repurchase of 2028 convertible notes.

Balance Sheet & Cash Flow of Wayfair

As of June 30, 2026, cash and cash equivalents were $1.07 billion, and short-term investments were $78 million, bringing the combined total to $1.14 billion compared with $1.06 billion as of March 31, 2026. Total liquidity reached $1.6 billion, including availability under the revolving credit facility, up from $1.5 billion as of March 31, 2026.

Long-term debt as of June 30, 2026, was $2.8 billion compared with $2.93 billion as of March 31, 2026, reflecting the redemption of the remaining 2028 convertible notes, funded in part through the issuance of a $400 million high-yield note.

Net cash provided by operating activities was $360 million in the second quarter, up from $273 million in the second quarter of 2025. Non-GAAP free cash flow was $301 million, up more than 30% year over year and the strongest quarterly figure since the second quarter of 2020. Capital expenditures totaled $59 million for the quarter.

Q3 2026 Guidance

For the third quarter of 2026, Wayfair expects revenues to grow in the high single digits year over year.

The company expects gross margin in the range of 29.5% to 30.5% of net revenues, with results likely landing toward the lower end as investment in the customer experience, including the loyalty program, continues.

Customer service and merchant fees are expected to be just below 4% of net revenues, while advertising is expected in the 10.5% to 11.5% range, also toward the low end. Together, this should yield a contribution margin in line with or slightly better than the second quarter. SOT G&A is expected to hold in the $360 million to $370 million range.

Adjusted EBITDA margin is guided in the 6% to 7% range for the third quarter.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 71.26% due to these changes.

VGM Scores

Currently, Wayfair has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wayfair has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Wayfair is part of the Zacks Internet - Commerce industry. Over the past month, Carvana (CVNA Quick QuoteCVNA - Free Report) , a stock from the same industry, has gained 6.7%. The company reported its results for the quarter ended June 2026 more than a month ago.

Carvana reported revenues of $7.38 billion in the last reported quarter, representing a year-over-year change of +52.4%. EPS of $0.42 for the same period compares with $0.26 a year ago.

For the current quarter, Carvana is expected to post earnings of $0.49 per share, indicating a change of +133.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.9% over the last 30 days.

Carvana has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.